Term duopoly Definition: A special type of oligopoly market structure that contains two large producers or sellers. Like other theoretical market structure, duolopy is seldom seen in the real world in its idealized form -- that is, a market with exactly two (more or less equally powerful) firms. The global aircraft market, dominated by Boeing and Airbus, comes close. The duopoly model provides insight into the type of competition encountered by most oligopoly markets, including the tendency to compete, collude and form cartels.